July 2012 Employment Report

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According to the Bureau of Labor Statistics (BLS) non-farm payroll employment rose by 163,000 in July, and the unemployment rate ticked up by 0.1 percentage point to 8.3 percent. Professional and business services, food services and drinking places, and manufacturing added jobs. Government employment shrank by 9,000. The change in total non-farm payroll employment for May was revised from +77,000 to +87,000, but the change for June was revised from +80,000 to +64,000.
 

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As we have been pointing out for quite some time, employment is converging with the previous peak at a slower pace than any prior recession going back to 1973. The economy still has 4.78 million fewer jobs than at the January 2008 peak.
 

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The number of people not in the labor force rose by 348,000 in July, within 79,000 of the peak set back in April. The ratio of employed persons to the entire population continued moving sideways, as it has since the end of 2009.
 

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The civilian labor force participation rate (the share of the population 16 years and older working or seeking work) ticked lower in July, 63.7 percent. At the same time, the annual percentage increase in average hourly earnings of production and non-supervisory employees fell back to 1.28 percent. With the price index for urban consumers rising at a 1.7 percent annual pace, that means wages are falling in real terms (i.e., wage increases are not keeping up with price inflation).
 

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Full-time employment dropped by 228,000 jobs, while part-time employment rose (+36,000) for a fourth straight month. It appears the rising trend in full-time employment, although perhaps not reversed, has at least stalled out.